Sunday, May 31, 2009

Some charts/stocks to Watch






















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ISIL
MAR
WFMI

WFT
MTL
HERO

Denninger on Friday's Close

http://market-ticker.denninger.net/archives/1072-What-Was-THAT-Friday-Market-Close.html

"Eurozone inflation drops to zero"

http://debtsofanation.blogspot.com/2009/05/debts-of-spenders-eurozone-inflation.html

Nice fundamental/macro read from JP. Watching the technicals on the miners very closely.

Hedge Idea of the Week, June 1-5

CASH, till market tips it's hand.

I do continue to like WFMI and ISIL here as short plays.
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Also watching MAR and SPG as well short, although they have not "shown" it just yet.

Some longs I am watching: CY, HERO, WFT.

The miners looks about as parabolic as can be right now technically. (AEM, SLW). These are high beta, and when the metal and the market are both going in the same direction (which has been up), these things fly. The very same goes on the way down too. They look very over-extended here to the upside. That does not mean they can not go higher, b/c they probably can. They are like 2X etf's for gold and silver w/o the decay factor. Nothing technically about them says short right now. Timing is everything. Same reason I called to pull out of AEM at 54, after entering at 53. Now its 61!

I will call em when I see em, and since they both hit High of 2009 on Friday, now is not the time to short, nor chase long. I do believe they will both roll over, very hard, when? (no clue) I'll wait til a double top w/ neg divergance to tip it's hand.


Fade the opening gaps and use the 30 min rule. (link)
http://erikmarketview.blogspot.com/2009/05/30-minutes-into-trading-day-rule.html

Swinging for singles, no doubles I see worth the risk/reward currently.

Friday, May 29, 2009

Breakout!!

don't look at the volume, never mind the man behind the curtain.


This end of day push up here, is about as skeptical as I have seen in a while, with that late day monster push up. They wanted to close > 8500 indu, they got it.

Since the market traded this week off very few earnings, and a good amount of economic data. Regardless of the volume, I think that leaders and laggards need to be respected here, and followed. Because the lack of intervention from things such as (m2m, earnings trough, etc), should help indicate WHERE money is going into and out of more.

WFMI does not look strong relative to the broad market.
ISIL which I mentioned last night was red today.

I trade on technicals and trends (ie: news/earnings/seasonal, etc), and much much less on fundamentals.

Fundamentals and P/E ratios however are NOT things to trade stocks over, short term wise.

However they do admittedly make me "look" at them and put them on my watch list (short or long) and chart them, only then when the chart looks like it agrees, I enter.

I think AEM, SPG, MAR, GS, MS are extremely overvalued here, but they are not being traded that way just yet.
(like wfmi and isil have already started too)

I believe this push up at end of day was very suspect. Maybe we go higher? I don't know. Something seems very fishy to me w/ today's tape. Might come of "perma-bearish".

I will continue to look more to find relatively weak stocks and Pops/gap ups to enter selected stocks short, until the vix re-tests it main resistance line (36 est).

If I do find another NUE type set up, I will play it. The "earnings trade" however is pretty much over here. So it's all back to T/A and sector to market relationship watch basically here to me.


Stocks like ISIL and WFMI that are tipping their hand that they are "non-participants here", look the most attractive to me. (even more than select longs, like nue was)

green = long
red=short

Thursday, May 28, 2009

Follow through

No one expects it, but I can see why...bulls nor bears have had any for a while.

Just when it looks like it's going to take off, OR crater, it pulls back or bounces up.

There is alot of divergences made on stocks and sectors now though, alot.

WFMI looks very sick relative to the market, so does CYN here.

I should-a-coulda-woulda looked more to continue to mash the gas on past winners short, as they have had more legs, vrs looks for new canidates. I do still think SPG and MAR are very yummy short, but they have not "tipped" their hand off, like WFMI already has.

ISIL is another one to watch, that looks pretty sick here.


I don't know what's left to go long with, maybe lots. But nothing that I see to feel comfortable and low risk with. NUE was great, but it took ALOT of weekend digging to find that kinda set up too. I don't see another one out there right now, but I will definatly look.

Short term, we are range bound untill we prove we are not.

Bulls AND Bears, neither are stepping up here too heavily.

Check out Cobra's N to N rule to looking at short term direction change, if you have not already.

http://cobrasmarketview.blogspot.com/2009/05/05282009-market-recap-firework.html

Tuesday, May 26, 2009

The 30 Minute RULE

This is a "different" name, to a rule that I trade by. It's waxie's 10AM rule, but not everyone lives on the east coast, so I will change the name to not make it "obvious" here. Just trying to share information, which has been very beneficial to myself. (his book is on my library to the lower right, fyi)


- When looking to enter a stock LONG, only do so on either
a) a GAP DOWN
or
b) a HOD that occurs after 30 mins of trading


- When looking to enter a stock SHORT, only do so on either
a) a GAP UP
or
b) a LOD that occurs after 30 mins of trading


This is a rule, that I trade by, and NEVER violate. (I used to violate it back when I was brand new to trading, and before I had ever heard of it, thank goodness that was only for a very brief time)

Not referring to just today only. (yes yes news driven, I got that)

To either a very minor or very major level, THIS HAPPENS EVERY SINGLE TRADING DAY.

The first 30 minutes of the market are, hmmm let me try to think of a decent analogy, of WHY following the 30min RULE helps so very much. Ok here goes:

First 30 mins of trading = Ice Patch
Stock Market = 600 H.P. Muscle Car

A Muscle Car, with summer/slick tires, running at 6000 rpm, just spinning out on-top of a patch of ice. You know in a very short period of time, that the tires will move from the ice to the pavement.

But ya know how when tires spin really really fast, some times they look like they are going backwards? So we don't even know if this Mustang Cobra is in 1st, or it's in reverse?!!! All we know is that when it moves from the ice, its going to MOVE and move convincingly either forwards OR backwards, and then we will be able to tell crystal clear, but only when it get's OFF of the ice.


When you finally get off the ice patch, it's means you can much more TRUST the direction after that point, as in if its Forward or Reverse. Remember, those tires were spinning on the ice, so again it's very hard to tell if they were spinning forward or backward! When you finally get off the ice patch, It does NOT mean that you go 0-100mph and get whiplash from the push (huge rally or huge crash). Maybe your only stuck in 1st gear all day and just put put put along. But at least you have a much better idea what DIRECTION the "put put putting" is in. You can trust the pavement (post 30 mins). You can not trust the ice (first 30 mins)

So again since you have NO clue looking at the tires if it's in forward or reverse, you know that it is a 50/50 coin flip, which you also know is NOT a trading plan! So you do what what's best, you LOOK to gain higher probability.

Here is how: If you slip to the BACK of the ice patch, you place your chips for it to go FORWARD. If you slip to the FRONT of the ice patch, you place your chips to go in REVERSE. (why???? b/c the odds are still only 50/50 on direction, but now there is much more room to travel from that selected point, and much more whiplash to catch in your favor (ie profit)

And if your wrong, and it does happens to continue to move back onto the pavement, you are already headed in that direction, so the whiplash (loss) is much less.

That is my terrible attempt at an analogy for the ONLY short gap ups, and ONLY buy gap downs.

On to the BUY if HOD after 30 mins, and the SHORT if LOD after 30 mins: That is along the same "analogy". You don't trust the ice patch (first 30 minutes). You only trust the pavement.
Once 30 minutes of trading has passed, you are no longer on the "ice patch" you are now on the pavement, so you trade WITH the market.

Trade WITH the pavement. (after 30 mins)
Enter AGAINST the ice patch. (initial gap)

I hope this is understandable, and/or helpful to at least someone.

Saturday, May 23, 2009

Hedge Trade of the Week, May 26-29 (bcsi, big, mrvl, azo, nue, spg, wfmi, mar)























BCSI: (Long) 6% short

This one is only a 2 day play here. Theme, yep you guessed it - "pre-earnings". Earnings are after the close on Wed, so get OUT before the close on Wed, no "gaming!" To me, this stock is a tech version of WFMI, an overvalued PIG. So also after earnings get's out of it's system, it will be one to look to short-bombs away. Did you see WFMI and how it was trading on friday on NO news?.....call the life-alert!! Anyhow, getting off-subject, more on that later. BCSI-long, tue / wed. Ideally on a gap downs of course.

BIG: (long) 14% short (favorite long)

Another "pre-earnings" runner here. Yep. Earnings are before the open on Thurs, so again get OUT before the close on Wed.
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JCG: (Long) 27% short
Earings are after the close thurs, so GET OUT before the close Thurs.

MRVL: (long) 3% short? 32%?

Same theme. Earnings are after the close on Thurs, so GET OUT before the close Thurs.

I like BIG the most. I do think the market goes LOWER this week, so longs are going against what I think will be the "tide" here. I am also getting some conflicting data on MRVL's short float, one site says 3%, another says 32%!


Hey, I could be wrong, maybe the market rallies!? That's why I always like to try to have longs and shorts selected, under any weather, to play the difference.
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As far as the broad market, like I mentioned in my last post. I "think" the higher probability is to play more heavy on the SHORT side, and with signal/target to "back-off" of VIX 36 (ie: the "main" resistance line)
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I would not look to "jump" into all these long plays right from the open on TUE, especially MRVL, since they don't report till even later.

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I do NOT have a set price target on any of these perse, I just feel they head higher going "into" earnings, via short covering + spec buying, that's all. That has been the trend pretty much all earnings season long. So for target, target is 5 min BEFORE the close - PRIOR to when they report, that's the target.

Also AZO reports Wed before the open, if your looking for a TUE only long, that looks to be in play.

NUE: (long). No earnings play here. (ballsy huh?) I do like the T/A set up it has. RSI is just a hair below 50 on both the daily AND the weekly here. I "think" it has some good support at the 37-38 range, which looks like it would be a better entry spot, so again I would not be drooling to gobble up this one up out the gates Tue, as I think it might be had a little bit cheaper. It's been trading in a 38-45 range, so if 38ish comes again especially, I would like it even more.
Target: 44-45

As for the Shorts: (inverse...ideally market GAPS up to start the week for better entries)

SPG: I think it has a decent shot to hit 40 this week. Weekly rsi AND daily rsi are both barely hanging > 50 by a thread. They both cross, perhaps at the same time, it's gonna be ugly. (similar to an opposite technical set up from NUE, albeit it SPG is much higher beta, so it makes bigger candles). Heck to just go "pure" hedge. SPG short + NUE long for the entire week, and profit the difference I like.
Targets: 44, then 40.

MAR: Targets: 19.90, then 18.42
(if you do not already use fib's as at least an adjunct to setting target's, I would. Recall my weekly 7.84 LVS target from 10.50?.....being off .05 isn't too bad)



WFMI: Targets: 17.51, then 16.04
(I like these 3 equally)

Friday, May 22, 2009

Using the two falling knives: VIX and $USD





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Stick a fork, Falling knife (utensil analogy week huh?)

VIX bottoms = Market tops
USD tops = Market bottoms


You can see VIX tops and USD bottoms do NOT have nearly as strong as a market correlation.


Q: Did the vix swing bottom at 26.57?
A: Depends what you mean by swing time frame. I do think the vix is going to 36 as it's next stop. (the major resistance line) Look for an RSI wedge b/o conformation first here, if we get that mon/tue, then you can book the vix at 36, it has a FREE RIDE there.

Trading plan: stay leaning bearish short term, ESPECIALLY shorting the gap ups.....till the vix gets to 36. (then............go to neutral)


I am not as confident 875 spx will hold & bounce this next time as I was on the last.
I am not saying we "must" cut through it like butter (although we might).
I am just not "expecting" a bounce/rally off of it, like I had warned/called on it's last touch.

Enjoy the Memorial day weekend.......

I will be posting some play ideas later on this weekend, as I narrow down my lists.

US dollar correlation

http://pragcap.com/performance-and-the-dollar-correlation

Thursday, May 21, 2009

Stick a fork in it

turn out the lights. This market is dead, we are headed MUCH MUCH lower longer term, of that I am certain.

Trade-able............ yes, always.

AEM call was obviously off time, as that is why I mentioned 2 days ago to EXIT, w/ a stop above the same entry price I called.

When I do see something "change" that was different from my original view, I respect it, and I will mention it.

The most successful and profitable skill to have as a trader is the ability bail on a changed trend, and not be stubborn with a prior idea, to take tiny losses.

Cut the losers off so fast they are barely even losers
Ride your winners all the way till they prove they stopped being winners

I mentioned last week, that this week I was NOT going to be trading heavily, as the POST earnings trend is now behind us. And that trade was pouring money w/ a firehose, so I wouldn't expect the "post-earnings" trade game plan to be a GIMME. So how I trade, I prefer to sit cash heavy, then when i observe what some new trends are, then start mashing the gas and posting several ideas again.

sector rotation wise, besides the "hyper-inflation" plays, it's difficult to tell what is strong and what is weak here just yet to me.

But I am seeing some trends here, and I will post them in the next thread.

The market action this week hasn't really shown any "gimme" trends here, of course the hyper-inflation trade yes. But now with the "hype" it has already, ie fast money etc. It's chasing big time here, and the easy money is already made. Maybe there are much more legs to it, I don't know. I just hate chasing, if you follow how I trade you know I prefer to scalp reversals swing trends, or jump on at least early in the train ride, and also bail early and reduce risk.

From how the market is trading here this week. It does gives me added conviction that on the LONGER term, we are headed much much lower.

Tuesday, May 19, 2009

AEM (update)


Its right back to the same price it was when i called it, on Thurs entry.

(timing is everything, and if you trade mostly options like me....theta kills)


If it breaks OVER 54.40, I will be looking to stop out at that price, and keep my losses small.

Double top here w/ neg divergence. (even tho the same price as thurs, it looks technically even better short today, so) I still like the play ALOT, just respecting the technicals here. (double top made, and if there is possible "support" at 50)

I'm looking to take half off at 50.50, and trail the rest. If it drops to 50, finds support and can NOT break below 50, I will be exiting all there w/ small profits.

If it breaks below 50, I see it going to 44.....

Stops are a must
Plan your trades, trade your plans

Monday, May 18, 2009

There went the 875 bounce...

I said it was likely going to happen......

http://erikmarketview.blogspot.com/2009/05/i-want-to-go-home.html

If you watch futures, you know they bottomed at 876 last night, and from then on (overnight and day session) the market kept going up, and up and up!

That's why it is wise to glance at the futures chart before the day begins. (think or swim has a nice set up)
- to watch HOW exactly the gap up, or gap down actually developed.

- Bottom at 876...going up, up since that = more bullish

- basically up and down all nite, just happen to end up = more bearish

So for anyone who says futures do not matter, they must not fade opening gaps too often.


Will it go higher? -- I don't know
Turnaround Tue, take it all back? -- I don't know

My intermediate stance remains to let the market tip it's hand, we are in a new chapter here now, and earnings is no longer going to be the driving theme, something must replace it. I don't think that is possible, for the bulls to replace it, yet get the same results, so I do lean bearish. But again, this is a new chapter here and I think it's best to see the market trade in it for a week before pushing on it hard.

On a daily note:
If we do gap up tomorrow, is Tue a day-trade short? Yes, I think it's almost a gimme.

Gap n Go's (market gap up, then continue up, or gap down, then continue down) do happen.

Two Gap n Go's back to back however, is extremely rare.

With that being said, the market typically likes to make it tricky, so watch us open flat, or slightly down tomorrow. LOL


Sunday, May 17, 2009

YGE - another "Earnings" pre-run play


Chinease Solar Play - YGE - Yingli Green Energy Holding


Earnings are Friday, May 22nd - Before the open
Short Float: 15.38%
(same theme....only looking to catch the pre-run / short covering move before the report)


Idea: (conditional Long)

- ONLY if the stock sells off Monday - ideally pulling back onto the price channell / 200ma/ rsi support.
If that does happen, I would like it long from tue am --- thurs close. (again, sell before earnings, no "gaming!")


Target: 10.49 (double top)
**If it doesn't pull back Monday, I pass**

AEM - Agnico Eagle Mines







Charts on AEM - Agnico Eagle Mines, which I mentioned on Tue.
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Target 1: 200MA = 47.00
Target 2: (start of channell) = 44.00

Friday, May 15, 2009

Weekly Recap/Preview - Change of Theme

So how was that gap-up today...... was it a fade? ;o)


On the Swing / Intermediate term outlook:

First of all, the earnings season is basically done here.
That was a seriously sick trend, that was raining money.

Of the past 3-4 weeks, the majority of "longs" that I called had one thing in common....earnings.

a) Find who reports the next week
b) Select the ones w/ the highest short float
c) Pick the ones w/ best charts

Buy in 3-5 days before ER, and sell the end of the day BEFORE earnings.
(fslr, jrcc, ma, anf)....Went 4 for 4. (there were more, but these all shared that underlying same trend)

I got an e-mail / comment asking if I still thought ANF was going higher, to 29 after earnings?
- I have no idea, (probably not) but if it does it sure as heck wont be w/ my money.

That is the exact reason I said sell Thurs at the close, get out BEFORE earnings!

I don't have a crystal ball, that's all it was was piggybacking on short covering into earnings.

We saw WFC blow out
We saw GOOG beat
We saw enough of the household names beat ER, that the trend was set pretty darn bullish out of the gates. So strap me in, and let's play ball, I will ride that trend all day long and via the SAFE way too!

Watch the news, charts, and sentiment and whatever "coincidences" you can, and there are trends, it's just if its one we were able to see.

So instead of "gambling" on earnings, since the common retail investor's biggest fear remember is "missing the big rally/up-move". We front run on him/her, and bail before him/her too!

BAM, there are your longs of the week. Buy 3-5 days prior and SELL BEFORE the report.
(seriously, that's it....once we saw the trend was "upside surprise"...who in the heck would want to risk being short for that kinda pain?)

I am just re-iterating the rationale for basically every long call the past few weeks, again.
This does not work EVERY earnings season (although it does for most).

The KEY POINT is that the trend has to be established as a bullish earnings season first, then only when that is confirmed...then you "pre-run" the later plays where the bears are all still caught sitting too heavily on. Yet of course BAIL before the actual earnings, to avoid the risk exposure, just capture the pre-run that's all......thank you, bye bye.

As far as past shorts (cyn,gme,lvs,tm,spg). Those were from t/a and sentiment.

I am no stock picker guru. I just try to trade what the market gives me.
If you watch it close enough, and just look for trends, they will come to you.

If they don't......don't lower your standards for it, be stubborn!

On to NEXT week, this trade is now in the rear view mirror. It was great while it was here though.

I am looking to short the gap ups, but that is the about only thing I really like here though, I do lean bearish, but since we are changing into a different "theme" here, I would only feel good shorting gap ups, since it's kinda of a new chapter here ya know.

And avoid the gap downs..... long OR short.

I "think" the market goes lower next week. But I don't feel too confident trading it yet, b/c again we are transitioning out of earnings season killer trend, and half my trades were based just on that trend.

I think that the lack of earnings is a BEARISH thing. As obviously the presence of them was a bullish thing. However, since it's a "new theme" here...I don't want to mash the gas, till we read a few pages in this new chapter.

Does that explanation make sense??

Besides AEM (which I already mentioned as Thurs entry...w/ 44 target).

I will NOT have any additional "hedge" longs or shorts calls for next week.

I am not just going to call something just to call it, or b/c i feel "pretty good" about it.
If i make a call, it does not mean it's going to be correct!!!
(It only means in my opinion, I like it ALOT).


I would like to watch the market trade around here, with out earnings for a little bit. Plus step back and re-evaluate all the WEEKLY charts to formulate and watch.

Have a great weekend.....!

Thursday, May 14, 2009

Options Expiration Friday



AEM - target 44 (1-2 weeks). I will post a thread w/ charts on it little later on.


When I narrow down the other ones (longs, shorts)

How was that ANF running into earnings today......... :o)
- hope no one was shorting down there close to 875spx


For tomorrow, I "think" 875 holds and I "think" 900 holds. Other than that, who knows?? I sure do not.

I think CASH is the best trade on expiration day.
(for the options lovers, like myself who like to trade w/ a couple hundred dollars on expo day)

Anyone who uses Max Pain theory as a minor adjunct to trading, knows spy's is 87.
...again max pain used ALONE by itself, is a sure fire way to get your clock-cleaned.

But to completely turn your head and refuse to even look at it, is also not the smartest thing either.

The best set up scenario that I see would be a gap UP tomorrow, to go enter short.

For any of you options expiration traders i am not "recommending" these. But wanted to bring them up to watch.

If you know how to day-trade options, and you have for a while, and you have made nice profits this week, wont risk any more than 1/5 of your profits from this week, and look to sell at least half at a double, thereby equal to moving stops to break-even. I do have some "ideas", for tomorrow intra-day only.

I think that we head lower tomorrow into the close. So I would LOVE to see a gap up. I might be dead wrong tho.....I might.


(only If we market gap up)

LVS may 10 puts
BGZ may 40 calls
SKF may 45 calls

When the MGM $7.00 stock sale news initially came out, lvs tanked right along with it. (sector relationship fear, which pretty much is always the initial reaction)

Then the next day (today) it rallied and separated from mgm. (wait, that's just them....NOT us!...again we have seen this back and forth psychology before, many times).

Call me crazy, but with the news of MGM selling stock at 7.00, I do not see many people "drooling" to buy LVS right here, right now, and risk HOLDING it over the entire weekend.

Just like w/ any event (earnings, bailout, rule change, merger, etc etc). The first reaction is usually the correct reaction.

If LVS came out with news such as "Don't compare us to MGM, we are NOT selling shares below our current price, I assure you"...then that would be one thing. (but they haven't).

Max pain is 7.5 (again, nothing to bet the farm on alone by itself....but worth being noted)

Short term wave structure, "looks" like this is the end of the wave 4 up, about to start 5, for EWT traders to consider/ look at.

Wednesday, May 13, 2009

Are we home yet?

We are very close to HOME

(ie 875 spx, I mentioned last night)

"Wait for the pullback, and then its a FREE RIDE TO SPX 1100" etc, etc I hear many cnbc heads say.

So this is IT huh? This is the "pullback" where every barber shop crowd and bridge club jumps in long for the "easy ride up to spx 1100 by year end" right?

I don't think so, nothing is free, and the obvious is usually the obviously wrong.


On the shorter time frame picture:

I do think if we get to 875-880 spx (which we are very close here already), it is safest to turn off the Bear Juice for just a little bit. (it's hard for some of us at times, I admit that myself). I don't know how much, how long, or how powerful...no clue...but I do think we get a bounce off 875spx, fwiw. It was the same price that MANY were calling for resistance, and it was for a little while. So I have a feeling the bulls defend it with all they have.

I don't really feel like MASHING the gas long at 875spx perse. But I sure as heck, wont have any shorts if/when we visit that level. (again we are almost there).

I am looking for play ideas (longs) just for that level. But since most everyone has reported here. I think its better to maybe look at the spy, and the etf's, etc.

I am NOT BULLISH! I just think they defend 875, and I would not be shorting aggressively at that level. I might look to be lightly dabbling my toes into the bull camp for a very quick 1-2 day trade, if we get to 875-880 and stall for a little bit. I might also (more likely) just sit back and watch for a little while and see what they do for a couple days.

But dabbling being the operative word, trying to get "cute" and push the gas hard and catch "every" single move...is a sure fire way to get your clock cleaned. Over-trading get's some of the best of us. (it has hurt my bottom line before, I can admit and say from experience, but it has also helped me learn the valuable lesson, the best way too.)

There are 2 days left in options expiration, and we are very close ALREADY to 875 spx here.

I mean for the last few weeks, I don't want to sound like I'm pounding my chest here, but I'm trading in the freaking zone.

I am not "falling in love" with this. Prior times, I might continue to mash the gas hard here trying to catch EVERY SINGLE MOVE down and up, then back down and back up....till of course eventually I was WAY wrong on one. That is where experience finally starts to kick in.....

fiscally, yes giving back some of your profits is bad, that is evident.

But more importantly, is mentally.

Mentally you are stepping to the sidelines with the "last trade" most recent in your memory, which was a loser. You don't recall as clearly the 5 or whatever winners before that, and the overall profit from the total of them.

Pull back, let it come to you. I would love to have the discipline to make just 10 trades a year, (excluding the daily gap fades of course, ya can't give those up!) yet watch the market just as closely or even closer. I think I would be just as good trading too, maybe better. At any rate, this is more a self ramble here. lol So my apologies. I do think it's helpful information though, fwiw.

Do not settle for "good plays"....wait till they become "GREAT"...

Cash is king....wait for an your entries to get EXTREMELY juicy, then hit em hard, do NOT settle for "yea that looks kinda good here, I haven't made any trades in 1.5 days, so Ill take it"

By the way, if you have not read "Trading in the Zone" by Mark Douglass, I would consider it.
Best trading book, in my collection, hands down.

Tuesday, May 12, 2009

Whipsaw, expecting much more to come.

The bears and bulls both seem to be getting aggressive here. I expect some nice trading swings over the next couple weeks. This week especially b/c of the expiration.

Bulls defended 900 strongly today. More importantly how?
Via dollar fear selling, and defensive stocks rally?
Not the 2 strongest or most bullish signals.
The market looks like to me it wants 875 here badly as it's next temporary home.

Called and caught the LVS today for a nice double today off the gap up. (w/ may puts) In the stockstop.org chat room live intra-day. For day traders, who like to interact or at least "watch" what other day traders are looking at or thinking, I would recommend at least checking it out. (also on my blogroll)

Picking your spots and fading the gaps here is trading phenomenally here.

As long as we are above 875 spx, I think the better trades are to find gap ups and pops to go short.

When we do get to 875, I would look to be neutral, step back and re-evaluate the bigger picture and weekly charts, etc. I agree w/ others on my blogroll, there should be a heck of a fight at the 875 level. As long as we are above it, I maintain a more bearish bias.

How is CYN back from Friday looking so far? geez louise....$$

Take profits when they come, and the shorter timeline trading the better here.
There are plenty of gaps here to play. Heck ONLY play the gaps, they are rocking here. Cash heavy by the end of the day.

I would still be looking to dip into short oil and gold here. However, it appears I might be 2 days early to the dance, in terms of the idea, but I have a very strong feeling that Friday's CPI is going to be a sell the news. Sentiment seems like way to much "extreme inflation expected here", and the we know the hype rarely ever lives up to the actual news.

Most anything which is excessive in anticipation, almost always leads to a less than "spectacular" event when it does actually arrive.

AEM looks to be setting up here just like TM did last week. No earnings coming up like TM, but the CPI is and I have a pretty good hunch we don't get the "extreme inflation" that is getting baked in here. I mean it makes sense, heck it's about the only way to get yet another "pump" into the stock market, scare people about the dollar immediately!!

If AEM holds flat here, or hopefully even pushes up a little higher going into CPI, I will be playing June Puts on it Thursday, for a swing trade. So put that one on next week's calls, with the early entry.

Mr Kudlow, you are a passionate man, but I have to tell you sir, but we are NOT going to DOW 10,000 and having a Dollar Rally. Pick one or the other and cross your fingers, b/c that's the best shot ya got. You do not get to have your cake and eat it too.

If I recall correctly, the last time we had a bull market and a dollar rally was in 2000. But I think the .com mania, 2% unemployment, and lack of national debt had a little something to do with that. Don't you?

ANF looks pretty nice here, for a long going into Friday's earnings. (close out Thurs by close)
- If it gaps down tomorrow, its a 48 hr buy to me, w/ stops. Or even safer, buy the gap down, close it out by the close and do the same if another gap down arises on Thurs.

If LVS gaps up again tommorow, its a short again to me, I would watch the technicals and look to short it for a gap/day trade. I believe it will close the week under 10.00, so I hope they pop it up again tomorrow off the gap. Rinse, wash, repeat.

Watch the russell. It looks weak here.
TZA (on a gap down/market gap up) would be screaming BUY ME.

Have a great weak, and spend all your money ASAP, b/c the dollar is going to be worth ZERO tommorow!!! LOL

Monday, May 11, 2009

Oil confirms, Gold not yet




From the way I read charts:






USO gave it's sell signal trigger today



GLD did not yet. (adx is below 10 on the 60min chart, it's extremly coiled here, see prior adx <10..............wait for it)

Sunday, May 10, 2009

Gold will retrace to 720 this year.


IMO on the intermediate term outlook on gold.

(adjusted GOLD target from 750)

- I feel that over the next 1-2 months will be a strong down leg towards
that, fwiw.



Saturday, May 9, 2009

Hedge Play of the Week, May 11-15 (ANF, CYN, LVS)


ANF (long): 19% short, earnings before the open on Friday. Same trend as other pre-earnings longs. Looking for some short covering going into it here. (sell before earnings,no "gaming"! (thurs by the close)
- Target 29.00/200ma

(this is the only long I like from the way I weekly hedge trade)

I was looking a little at sqnm and akns long (but way too speculative and too low volume to "call" here...)

CYN (short): See prior thread w/ chart
- targets: 38.50, 33.00
.
LVS (short): See prior thread w/ chart
- targets: 9.00, 7.80

as far as TM, to not be "in it" already here, is chasing it.....i do think it has more short term downside next week, but to me..if your in it...trail it and run w/ it. If your not, don't chase it.


Also the OIL and GOLD trigger set ups: See prior thread w/ chart

LVS appears to have Topped out.










Weekly: crossed > 50 rsi, that's about "the" most bullish move possible you can expect to get, especially on LVS. (now.........it hangs barely above, which is massive downside potential)
.
Daily: Backtest from below of prior rsi support
.
30min: Backtest from below of prior rsi support


I kinda hope it does not gap down big on Monday. (even tho I think it probably does, dangit). Because I would like to get a gap up or flat to enter to purchase some May 10 puts on this one, to grab that sweet OTM-ITM crossover, then ring the register.


Add this one to Ideas of the Week
(short)

Friday, May 8, 2009

US Dollar, Gold & Oil (May 11--15)







I might have made some ok calls over the past few weeks.

But one thing i did NOT see at all, and called wrong, was the U.S. Dollar falling off this hard...WOW.

The dollar was down 1.8% today.
Hammered again.....

Crushing the dollar = Stock Market rises *pretty much* (commodities go up...brings market up with it)

Yes, it's a fake way to push the market higher, but it's to be respected and traded none the less.
Fear of inflation? I personally don't see it anytime soon, but we shall see.

If Bob Smith owns a stock today that went up 1.7%....well Bob Smith's net worth was decreased today. Kinda sucks for Bob, don't it?

But anyhow, all that matters to me, is a trade set up.
We have one here, a VERY good one, on gold/oil. (dzz,dgp,gld,uso,dto,dxo...pick your poison)

I'm not calling a "swing" bottom to the dollar or "swing" top to gold/oil.
But I am leaning towards that.

I put some annotations on the dollar, gold and oil charts.
.
I "think" that the U.S. Dollar goes up hard, and gold and oil both sell off hard this coming week, like seriously hard. But that is just what i "think", I wont trade what i think, till the chart confirms my thoughts.

In regards to these charts. So instead of making a "call" that gold and oil sell off hard this week, which I do feel is the more probable trade coming this week. There is no need to call something before conformation.
.
The most beautiful thing here on this set up is, the charts are "this" close...to conformation. So wait for it, get it, and TRADE IT!

Unless it's a total mini-dogi day across the board everywhere on Monday, I believe the direction will be decided on Monday, and the trade will last for the entire week. (from my experience of breakouts or breakdowns from a 60 min chart rsi wedge of that length/size)

Just let the chart tell you which way it wants to go, b/c it is going to, and when it does, there is going to be enough meat on those bones (long or short) to run it for the majority of next week.

Remember Stochs can stay pinned up or down for a very long time. (we know that from this rally!!! and from last year's crash too)

To me, by far the best signal is the RSI wedge (especially on gold, that is a very coiled and pretty wedge there, I can't wait to trade the hell out of it)

Wait for the RSI wedge to breakout or breakdown, and then jump aboard for the ride next week.
--I'll re-post next week, when it does w/ jmo targets of the move--

Have you shorted a Toyota Lately?

clunkety clunk...

Told ya those June 75's P's @ 1.70 were a steal.

Sorry for setting the target too low.
3.00 each next week, was way too conservative.
Looking like 3.50ish today.

Thursday, May 7, 2009

Hedge Idea of the Week, May 11-15 (a) (CYN)




If TM sells off hard tomorrow, it's NOT on next week's ideas.

Ya know, it's really really hard to find a long for next week. Geez, I went through all my tickers (which is about 250 of em). Looked at who is reporting earnings next week, etc etc. I have a few, but I need to do some more homework, and I will put the best couple to me up this weekend. So for now, I just have 1 short and 1 conditional. (no long hedge yet)


CYN short: There is no need to "always" look for BAC and C. I mean there are "other" banks out there to trade. If you enjoy the MM jerkin and Washington puppet master over and over and over. CYN is not a tarp baby, it is not in in Govt Relief Index. (yes the govt relief index lol)

http://finance.yahoo.com/q/cp?s=%5EQGRI&alpha=C

I recall seeing CYN in a pretty good amount of headlines, mentioned at times along w/ bac, c, etc...bad assets, etc, etc. (what that means to trading it, nothing much)

I don't know this to be "exactly certain", as there is no meter for these kind of things. But in a nutshell, to me...CYN is not that healthy, but was juuuuuuust healthy enough to avoid becoming a "Tarp baby". Well that's my view. So this one pretty much avoids more of the govt gyrations more than some of the others, and the chart is very pretty to me.
.
1st target: 38.50 (bottom of channel support)
2nd target: 33.00 (origination of channel)
.
I would like to see this one gap up tommorow hopefully, and plan to enter tommorow (if it starts out green in the AM) as an early entry for next week.

WFMI (short-if)

This thing is almost comical. I almost was tempted to call it as a LONG going "into" it's earnings on May 13th as well, b/c of the short float. But not this one, short float + earnings up coming is a very strong trend, but no way I could trade this one long here. I mean when you look at the chart you will see. This is one of THE best performing stocks in the the ENTIRE market for 2009! I remember watching this one in 2008, I seriously thought it was going under. About 3 weeks ago, I went inside one to pick up a couple things, it was like a ghost town. (this was a weekend afternoon too). I think it's sickly overvalued, and should be trading 15pts less than this.

That opinion is just my opinion, and does not make it a short. It makes me "look" for an entry to short it, but that's about all.

This stock has 19% short right now, with 7.6 days to cover. 19%!!! And this is like "The stock of the year for 2009!" right?

This set up though is not common. I mean usually you see stocks that are either:

A) TM...no one is short, "everyone is bullish" and the stock has been in a serious uptrend, so much so it's probably TOO MANY people long.
-or-
B) MGM....everyone is is short, "everyone is bearish", and the stock is down so much YTD, that the hedge funds do not mind a few short squeezes, b/c they are still up 40% ytd

This one is silly, b/c its very short heavy, yet it's like one of the BEST performing stocks out there for 2009.

What does this "look" like to me. It looks like that the short float must be thinking "it will fall eventually, we are not worried about this short term loss we are taking, it will fail". As this is not typical, but surely stubborn lol. Yet it also does give me added conviction too, that "yes it will fall from these levels". The key, is timing.

At any rate, the play on WFMI is only a conditional, so it might never even present. But the best risk/reward is "if" A, then B. If that never comes that kindly, oh well...it's a pass.

If it happens to get a massive squeeze UP going here very soon, it's a short immediately AFTER that is out of it's system. (this would be like at least 2-3X avg volume with a huge pop in 1 day). Or a strong parabolic run up INTO earnings. One can play the RSI wedge developed on the daily chart. But this one is hilarious, and it's definitely a bubble to watch.
.
So yea, the "ideal" set up would be an "so-so earnings", then a 15% pop in the A/H on monster volume, from nervous shorts capitulating, then the next day it's a swing short on the gap up.
.
Unsure to call a target, b/c i don't know the entry price yet. But I think if that played out like such, it would be good for 10%.

Wednesday, May 6, 2009

Goldman Sachs + (Public Stockcharts)












I mentioned once the stress tests results are OVER with AND GS is > 135, it's a short.

Yup, I do think that.

But instead of shorting bombs away at 139, I would prefer to short at 135 and feel very confident.

If you look at the longer term charts, yes there is that long term resistance line. But what if it stalls there. That can mean:

a) it's about to fall back into that the bottom support of the channel it is in, making a nice short trade, with a 100-110 target.

or

b) it's forming a bull flag here, and basing and will soon after consolidating break out of the entire main resistance.

.

That line is speculative, yes it's there. But I would rather short it at a "not as perfect entry" and have t/a conformation, than just pull the trigger here.

I mean consecutive white candles are NOT a reversal signals, well 3 white candles can be considered a bullish reversal from a bearish trend. (not anything here yet)

If I was FORCED to take gs long or short right now for the next week, I would not even have to think about...gimme the short side. However thankfully I am not "forced" to.

So i would love to see a dogi tomorrow, and get some neg divergence going maybe even land right on top of that rsi support on the 30 min chart, THEN...when if/when it cracks...mash the gas on it.

I think there is tremendous downside potential on goldman, and earnings and stress test are now out of the way. I have a good feeling that there will be lots of "back" analysis of the stress tests, and alot of 2nd guessing, and "worry". That's just my hunch though. I am not trading on a hunch, nor should anyone.

My gut says short.
My chart says wait for conformation.

I wait till they both agree.
.
IN regards to Public Stockchart's, see last thread and leave me your thoughts/input.

Whew, the "Stress-Tests" are OVER!

Leeky Leeky

Who cares about making them "official" now anyhow?
Maybe those were not the REAL numbers? (lol)

Who knows, I am glad to have the stress tests behind us though, because the news and hype, I mean it was like the only thing on tv at all, going on and on and on and on. Geez.

When things like this stress test this come up, I said before to me it's best to play heavy cash and watch the gyrations and trade OTHER things or nothing at all.

Gamestop was a nice one today, considering the entry trigger was >30 yesterday.

Trades of this week I brought up, to me, are over with here. Congrats if you made lots of money in either or all combined as a hedge. (spg was the one loser, but the call was as a hedge combo, so I can't help ya if you just picked only one out of the bunch ya know, wasn't the intent) The reason I like to call "hedge" trades, is that the market direction does not have to be "spot-on", as long as the difference in the positions is profitable, so are you and I.

About the Stress Tests, I suppose the point I am trying to express is that when everyone is watching this "one thing"...there are always still OTHER trades out there, to include no trade at all.

I did purchase a small amount of FAZ may 5 calls right at the close. I had wanted to wait till one more pop and AFTER the stress test results. Well we got basically got those both today. Even though I like FAZ here, that's not something I would "call" up on this blog, because it's way way too speculative and to high risk to "recommend" to others. But sometimes ya do deserve to "treat" yourself. So I used exactly HALF of my profits in my GME puts (which was a 48hr double) for which to do so.

I am totally out of all my plays of "this week".....all of em.
I am in 98% cash, and 2% FAZ calls.

I don't think the spx crashes to new lows soon or anything. But I do like the risk/reward here on FAZ for the near short term. (again, not enough to go bonkers on or even regular size on)

Q:
I am going to post my stockcharts watch list publicly here soon, but I wanted to get some feedback, as what is the most beneficial to others.

a) Index's only? (60min, daily, weekly)

b) Stocks I am watching and what set up i would like to see BEFORE potential entries?

I figure that pretty much everyone has the index charts themselves (i hope they do if they trade!) So would it be more beneficial to post stocks I am watching, so then when i see set ups possibly developing, I can just add them to my "public" list?

c) something else totally???? If so let me know your feedback. Thank you

I am not going to post 250 tickers, because I look at these charts every night so I know what I am looking for, but it's too much to keep updated, hence I am asking what's best or most beneficial. Let me know

Besides the TM trade, I will be posting next week's idea's likely tomorrow evening. So far, that's all i got....no need in pushing things when you are not sure if it's time or push or not.

Toyota Motors - early entry to one of next weeks Plays of the Week







is setting up a very nice short here.




Earnings are Friday, so it's Tricky. And to "game" earnings is a gamble, not a trader's play.

I think they sell off HARD on earnings, i feel very strongly about that, and I see TM below 80 next week, actually close to 75. (and that's conservative)
.
So play it here, without having maximum exposure to earnings. Id look at the June 75 Puts. (trading at 1.70 today). I see them > 3.00 by next week.

Playing the June's let's us still short it, yet not be as exposed to the earnings on Friday.
(may is gaming earnings, and too risky to call or recommend)

For non-options traders, to play the stock short, I would look to enter short immediatly AFTER earnings.

I have NO IDEA what kinda numbers they report, no clue. (no one does, and that is a sucker's play)

But what I see as the Trader's play here, is this stock has basically NO SHORTS...none.
0.73% of the float actually from the data.

There was a very good reason I called JRCC long, in ADDITION to it's chart. (way too many shorts before earnings)

No clue what TM will report, but there is ZERO squeeze potential on them, none.

So the most bullish thing i see for TM is "good earnings", then everyone takes profits, as it has had an incredible run, and the catalyst is now gone.

If you haven't taken MAJORITY profits on LCC and FEED, then you are a pig.....and deserve to be slaughtered. (don't get greedy!)
.
How is that GME>30 entry short trade looking so far?

Tuesday, May 5, 2009

May 5th: Market

LCC (5.00 was the target, hit today)
- it's up 27% and hit 5.00 target. No reason "sell it all" b/c its obviously working. But I would be taking profits and tightening stops.

SPG still looks good here

GME still looks good here
(I thought they had already reported, but now I see they don't report till May 21st, my apoligies, I will check 2 site's next time. It's a good amount away so that is not really a factor here. Stock's like GME do not get (2.5 week long pre-earnings momentum rallys lol) As long as it's not 1 week within earnings, i like it alot.

FEED bottomed today at the exact same price it broke out at yesterday...3.85, that's a pretty healthy and bullish sign.


I took alot of profits and money OFF of the table today. I still hold all 4 positions, but it is only about 1/3 the amount of each now.

I think it's a good time to pull back and be cash heavy here, rather than to try and "game" the stress tests. That's a gambler and sucker's play, not a traders.

Instead I would much more prefer to see an extreme over-reaction maybe, then we have a much higher probability trade to fade it back the other direction. (like airlines off swine flu)

There are times to mash the gas
There are times the best trade is no trade at all

VIX was down today, which has a bullish undertone. So on a "broad" market view, today looks like a digestion day. I have over 250 tickers on my watch list, and i see more red than green, but i also don't see hardly any breakdowns (AKS is about the worst i see at -9%), but i do see more breakouts (FIG, GNW, AIG, MGM, LVS).

Time to let the market tip it's hand here and sideline watch.

Monday, May 4, 2009

Turnaround Tue?

I'd look for a consolidation day tomorrow. Flat to slightly down, but i don't think we tank. Maybe give up 20-30% of today's gains though.

Watch what sector is weak, i think it's going to tip off more than just tomorrow, of where money is coming out of sooner than later.

I'm not saying the market is "manipulated", but the bulls were strategically making it look as strong as possible. I mean as it looked like it was fading with an hour left, what one stock out left feild came charging up on NO news at all. Yep..GS. The one that frustrates the bears the most, then SPG hits high of day? spg is a reit! Lots of panic end of day short covering, looks like. But very very well "evoked" by the bulls.

It's all up to Bernake. And i don't know who is buying at these levels, but "some" less seasoned shorts have to be scared to death after today. Which is why also the bulls wont likely push too hard for tomorrow.
.
Some stocks to watch for weakness tomorrow, fwiw
- gme
- aem (if gold is flat or down)
- cf
- all
- ebay
- yhoo
- ma
- ibm
- goog
- spg (yea it participated today, but that was a squeeze to me, if ya have any doubt, just look at the candles this thing makes day in day out, shorting it on odd days and buying it on even days looks like it's made a few traders millions)

- the BIG CAP techs, yep. Look at the index's for today, the $NDX was the weakest one of all.
(that is very very rare)

I got the list mainly from the stocks that seemed to "not participate" to much today........as it was not un-noticed.

The Nasdaq comp was even stonger than the Nasdaq 100. The $NDX has actually been MUCH stronger than even the Nasdaq comp over the longer term. Look at the charts, it made higher LOW in march 09, as compared to Nov 08, and it's actually over it's daily 200sma.
.
The Reason I mention this, is that today was ALOT of short covering and pumping of the beaten downs. That does not mean the market is going to fall off a cliff tommorow, but ya get an idea where the chips are being placed, that's all.

Oh yea, there we go, Cramer is pumping TECH big time here....hehehhe
that's gonna be the weakest tommorow, thanks for the conformation buddy!

"teck-a-leck"? oh my.....